HSBC and other financial institutions across the country (banks and credit unions alike) may be using unfair practices to wring HSBC overdraft charges from their customers. These practices may include everything from customers being hit with unfairly high HSBC overdraft charges to customers participating in the overdraft program without knowing they could opt out at all.

Basics of Overdraft Protection

It is common practice for banks and credit unions to offer overdraft protection programs. In many cases, such programs can be beneficial.

Essentially, overdraft protection is meant to prevent consumers from not being able to pay for purchases when they overdraw their accounts. While customers are allowed to overdraw their account and make their purchase, they are charged an overdraft fee to cover the transfer of funds. In some situations, this can be undeniably helpful.

However, overdraft protection isn’t valuable to all customers. In fact, many customers find that they are left facing excessive HSBC overdraft charges, or realize that they were not fully informed of how their overdraft protection works.

Indeed, a growing number of financial institutions are being accused of using unlawful practices to charge their customers excessive fees or force them into overdraft protection programs without providing all pertinent information. A bank might not give customers all the necessary information about the program, or may fail to inform them that opting out is even an option.

Banks and credit unions can use these and other practices to wring the most money they can out of customers through HSBC overdraft charges. Banks brings in billions each year from their overdraft fee programs alone.

Examining HSBC Overdraft Charges

One increasingly common method banks and credit unions are using to manipulate their customers into excessive payments is purposely reordering overdraft charges.

While simply reordering payments may not seem like a big deal, it can actually cost customers a great deal more. Transactions are generally processed chronologically ─ that is, in the order in which a customer makes them. But sometimes, a bank can choose to process transactions from largest payments to smallest. When processed this way, each progressive payment is increasingly more likely to overdraw that account and incur HSBC overdraft charges.

Transactions are generally processed chronologically: that is, in the order in which a customer makes them. But sometimes, a bank can choose to process transactions from largest payments to smallest. When processed this way, each progressive payment is increasingly more likely to overdraw that account and incur HSBC overdraft charges.

One of the unfortunate side effects of overdraft fee programs is that it is often the customers who can least afford it that are charged most often. This is because bank customers who consistently have less money in their accounts are much more likely to overdraw them.

Of course, excessive HSBC overdraft charges and unfair practices could affect any customers. Some customers who have been affected by unlawful overdraft charges have brought successful banking class action lawsuits over these practices.

If you have been subjected to unfair HSBC overdraft charges or deceptive overdraft practices from another financial institution, you may be able to join a class action overdraft fees lawsuit.

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